India’s monolith Public Sector Undertaking that has a budget of its own

From the construction of the first railroad in India that began in 1850, and the first train that was run on April 16, 1853 from Bombay (now Mumbai) to Thana (Thane), to the unimaginable growth of the railway network, the country’s biggest Public Sector Undertaking has come a long way. But at every stage in its evolution, Indian Railways have faced a new set of problems and raised fresh controversies.

Whatever those problems or issues that confront the system there can be no gainsaying the fact that it remains a showpiece within the country and outside. Never mind the upkeep of the assets or rolling stock, along with China and Russia, the Indian Railways top the list of being the largest network. Carrying well over a million passengers every day and moving about 1,000 million tonnes of freight per year, the very fact that the operations have continued for over a century and a half stands testimony to the strength of the systems.

Largest employer

In terms of employment generation, the Railways provide jobs to about 15 million people, not to talk about the indirect employment. Long before the government of India took up the massive National Highways expansion and upgradation programme, the Railways virtually connected every corner of the country and put in place an effective and efficient network to move people and goods across the country.

When the British decided to launch a railway system and network, the objective was entirely different — to maximise political and commercial advantages along specific routes and to provide for both administrative convenience as well as holidaying. But today the norms are different. In addition to expanding the existing network and providing better connectivity, the focus has been on offering more comfort, greater speed, and modernisation of the systems.

The Railways now have a complex system of suburban systems, the Metro rails, the zonal railways, inter-city trains, and the long distance expresses, not to mention the slower intra-regional passenger trains.

From the time of Independence, successive Railway Ministers have done their bit to expand and modernise the systems. From an entirely metre gauge system, it went on to broad gauge as well to gain speed. Finally, it was decided to adopt a unigauge system for easy travel and connections. From coal-fired locomotives, it moved to diesel and then a massive electrification through an overhead electric traction.

Development

Now, the Railways have moved on to super-fast trains, the Rajdhanis and Durantos. Of course, they have not yet reached the age of bullet trains or the special elevated corridors. Plans are being firmed up for these special corridors and semi-bullet kind of inter-city trains. But that will take time.

The Ministry controls the whole show, but the Railway Board takes care of the day-to-day operations. This is the only PSU that has a budget of its own. Like the general budget presented annually to Parliament by the Finance Minister, there is a Railway budget presented by its Minister every year.

The Ministry also has a few smaller undertakings related to the Railways — the Indian Railway Construction company or IRCON, the Container Corporation of India or CONCOR, the Rail India Technical and Economic Services or RITES, IRFC, CRIS, and the IRCTC that handles the catering and the online booking system. The Indian Railways have planned joint ventures to take up the massive Western and Eastern Corridors that will link New Delhi with Mumbai and Kolkata respectively. Several manufacturing units such as the Integral Coach Factory, the Rail Coach Factory, the locomotives units and several other such units like the Wheel and Axle plant, come under the Railways too.

The challenges

It must be to Nitish Kumar’s credit that an objective and professional White Paper was presented to Parliament under the NDA regime. That was when the Railways seriously introspected and identified avenues to save precious resources and invest wisely on projects. But the decisions taken during his tenure paid dividends when his successor Lalu Prasad took over and he cornered much of the credit for the now famous turnaround in its fortunes. The State Governments had to share costs for all new projects and metro rails to ease the burden. Even then, there has been a marked downslide in the Railways, which the present incumbent, Mr. Bansal, is trying to reverse.

The Railways have to become lean and mean, competitive and efficient. The operating ratio, now almost 90, has to come back to below the 80 level. Second, they have to compete with the airlines for one segment of passengers, and with road transport for the movement of goods. Third, despite talking about the potential for private sector participation for years, the Railways have not managed to attract private investments, mainly because they have not been able to spell out a clear policy. Given the need for such massive doses of investment, it is about time that the Ministry and the Board sit with the private sector to make it attractive for PPPs.